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6 - Developing a Relationship Management Plan
- Edited by Jean Paul Wijers
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- Book:
- Managing Authentic Relationships
- Published by:
- Amsterdam University Press
- Published online:
- 24 November 2020
- Print publication:
- 04 March 2019, pp 122-127
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Summary
Once defined, the Relationship Management Strategy needs to be implemented. This can be done based on a Relationship Management Plan. This might seem obvious, but it is no easy task to document the complexity of relationship management in a simple list of activities. In this chapter we will discuss from a practical perspective how relationship management activities are an integral part of the overall activities of the organization. Strong relationships are built across the silos of the organization where the Manager of the Network provides the strategic context and is the orchestrator or facilitator of relationship building and maintenance.
Cascade of objectives
Establishing a relationship is never an objective in and of itself; each project and every resource invested ought to contribute to a business objective. A Relationship Management Strategy and the related Plan can therefore be considered as parts of a cascade of objectives.
As we see here, many different initiatives can be set up within the same program working ultimately on the same strategic objective. On a continuous basis one needs to assess whether the initiatives still contribute to the overall strategic objectives. This underscores the need for the organization to have a shared understanding of the vision and mission of the organization and therefore what the strategic objectives are (see also Chapters 1 and 4).
Relationship projects can therefore be visualized as part of an organizational pyramid of objectives starting with the Networking Vision of the organization which is translated into strategic objectives and a commercial plan. The marketing and communication strategy supports the commercial plan. Similarly, the (Networking Vision and) Relationship Management Strategy supports the marketing and communication strategy.
The above pyramid is only an example. The pyramid can also be defined from a corporate strategy perspective where relationship management might be a cascade of objectives flowing from the strategy of the executive office rather than, as in this example, the marketing and communications strategy.
Relationship Management Plan
After the Relationship Management Strategy is defined and documented, the conclusions of this strategy form the basis of the Relationship Management Plan. This Relationship Management Plan is ultimately the document that will guide the allocation of resources (time, people, money). Simply stated; “Now, what are we going to do and who will do it?”
7 - Relationship Management Capabilities
- Edited by Jean Paul Wijers
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- Book:
- Managing Authentic Relationships
- Published by:
- Amsterdam University Press
- Published online:
- 24 November 2020
- Print publication:
- 04 March 2019, pp 132-148
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Summary
The complexity of managing relationships is increasing rapidly as more relationships are generated and they mutually reinforce each other. For an individual to manage a personal relationship, skills and the right attitude are required. For an organization to manage the complexities of multiple relationships, capabilities are required in addition. The critical capabilities required for effective relationship management are described in this chapter.
First we will cover the data management capability. Data allows the organization to steer, monitor, and improve relationship building. Having the ability to collect relevant data, draw insights from the data, and act upon those insights is a valuable capability allowing the organization to effectively develop relevant relationships with stakeholders.
As concluded previously in Chapter 1.12, to build trust in the relationship it is important to deliver on commitments made and be consistent in communication to stakeholders. However, when managing multiple (communication) channels it can be challenging for the organization to ensure consistency let alone allocate the best message to the most appropriate communication channel. Therefore, omnichannel management is included in this chapter as a key relationship management capability.
Lastly, as reputation is a fundamental building block for establishing sustainable relationships, the capability of managing communication and media is briefly discussed. In the last paragraph we provide examples of how to strenthen relationships via earned media versus paid or owned media.
Data management
At a Tourism and Travel event, a journalist told the story of his visit to a boutique hotel in the Sahara Desert. It was a small hotel, not part of one of the larger hotel chains, and would occasionally be visited by international guests although it catered primarily to the local market. When he stepped out of the taxi, the bellboy took care of the luggage. The journalist approached the reception desk and, when he gave his name, the journalist was warmly welcomed “Ah, Mr. Baker, welcome back to our hotel. It is so good to see you back after such a long time!” The journalist, Mr. Baker, was very pleased although also somewhat astounded—he had stayed in the same hotel probably ten years previously. How did this small hotel keep up with his records? They must have a great database. It was only when he turned around to check the whereabouts of his luggage that he understood.
5 - Relationship Echelons and Stakeholder Management
- Edited by Jean Paul Wijers
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- Book:
- Managing Authentic Relationships
- Published by:
- Amsterdam University Press
- Published online:
- 24 November 2020
- Print publication:
- 04 March 2019, pp 104-121
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Summary
In protocol management, stakeholders are clustered in echelons based on their strategic importance and closeness to the royal family. At events, each echelon is treated differently. For example, the top echelons are often seated close to the king, while for other echelons only a meet-and-greet with the king is staged. Modern protocol expands on the concept of echelons and in a broader setting, frequently using the term segments for clusters of stakeholders with similar characteristics. In Chapter 4.4 we discussed that many organizations are no longer operating in a value chain environment but rather in a value network environment, or ecosystem. This implies that the number of participants — potential relations— has increased. The challenge for the Manager of the Network is therefore to define a strategy that allows the organization to focus on those relations that matter most and to identify the approach per stakeholder that is expected to deliver the best Return-on-Relationship.
This chapter will first explore the broader set of participants in the value network in the form of a Stakeholder Management Approach. The stakeholders relate to both the internal and external environments of the organization. In the second part of this chapter, one specific group of stakeholders — customers— will be detailed somewhat further in the context of Customer Segmentation.
The challenge for the Manager of the Network is to define a strategy that allows the organization to focus on those relations that matter most and to identify the approach per stakeholder that is expected to deliver the best Return-on-Relationship.
Stakeholders as relationship echelons
A relationship is, according to The Oxford Dictionary, defined as “the way in which two or more people (or things) are connected.” Similarly, a relation is defined as “the way in which two or more people or groups feel about and behave towards each other.” Thus, a relation can improve or be strengthened. In simple terms relationship management is therefore the orchestration of (mutually) beneficial connections between people. We define relationship management in this book from an organizational perspective as a capability facilitating sustainable networks for the mutual benefit of the organization.
8 - Assessing the Return-on-Relationship (RoR)
- Edited by Jean Paul Wijers
-
- Book:
- Managing Authentic Relationships
- Published by:
- Amsterdam University Press
- Published online:
- 24 November 2020
- Print publication:
- 04 March 2019, pp 149-158
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Summary
Relationships require investments that most likely will not deliver an immediate return. After all, building true relationships requires trust and acts of kindness such as delivery of favors with uncertainty both of return and timing. Although it takes some of the romance out of relationships, organizations need to measure progress. Once the Relationship Management Strategy has defined clear objectives, the Manager of the Network can be made accountable for the investments.
Chapter 8 will explore the economics of relationship management. The impact can also be visualized in a network with social network analyses (digital) techniques, which we will discuss briefly. After describing the variables that define the economic value of a relationship, this chapter will conclude with the cascaded approach from Relationship Management Strategy to a defined Relationship Management Plan.
Return-on-Relationship
Successful relationships are pleasant, authentic, and durable connections with another individual. As discussed in Chapter 2, royalty leveraged relationships to strengthen kingdoms and safeguard future generations’ siblings. There was little romance in arranged encounters of nobility; they were highly staged. Similarly, in current business, relationships serve a purpose for the broader benefit of the organization.
Balancing reciprocity; balancing the value to the stakeholder with the value derived from the stakeholder
As mentioned earlier, a sustainable relationship has a mutual benefit that is continuously (re)balanced; it is balancing the value to the stakeholder with the value derived from the stakeholder. Stephen Covey even uses the term emotional bank account as a metaphor for the balance in a relationship. He defines the emotional bank account as “the amount of trust that's been built up in a relationship.” One can make a deposit into the emotional bank account (via an act of kindness, for example) or a withdrawal from the emotional bank account (by asking for a favor). Covey has identified six ways to deposit into the emotional bank account:
• Understanding the individual. Listen to what the other person is saying and empathizing with how they may feel.
• Keeping commitments. Arriving on time, following through on promises however small helps build up credit in the emotional bank account.
4 - Relationship Management Strategy
- Edited by Jean Paul Wijers
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- Book:
- Managing Authentic Relationships
- Published by:
- Amsterdam University Press
- Published online:
- 24 November 2020
- Print publication:
- 04 March 2019, pp 86-103
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Summary
One of the earliest documents on strategy was written by the Chinese general Sun Tzu (or Sunzi, The Art of War). Sun Tzu's Art of War says that the greatest generals gained victory without fighting any battles. They would use diplomacy, respect, reciprocity, fear, kindness, or any other psychological means to get what they want. Knowing what to want and what the other side desires increases the chance of bringing a conflict to a good ending by 50 percent, according to Sun Tzu. To achieve this, it is important to collect information about your current position, about the position of the opposite party, and to position yourself in the shoes of the opponent. Sun Tzu also brings in the element of timing — it is not only important to do the right thing; it is also important to act at the right moment.
Sun Tzu considers relationship management an integral component of military strategy. Good relationship management supports the military strategy, and in turn a good military strategy is the basis for successful relationship management. In this chapter, Relationship Management Strategy will be explored as a basis for establishing and strengthening a Strategic Relationship Management competency.
An active role for the Manager of the Network in the strategy debate of the organization
From an organization perspective, relationship management is an investment and therefore should deliver a return. To assess the return, and therefore the success of the relationship management activities, it is vital to understand how success is defined by the organization. What does the organization want to achieve? To be successful as a Manager of the Network it is important to understand the vision and strategy of the organization. The overall vision and strategy of the organization can be translated into a Networking Vision and a Relationship Management Strategy. The Relationship Management Strategy in turn is executed via the relationship management. This approach is a top-down approach. In this approach, it is important for the Manager of the Network to:
• Understand what the ambition of the organization is (one year, three years, and five years from now).
• Understand where (e.g. which markets, which customer needs, what policies) the organization wants to focus.
9 - Relationship Performance Management
- Edited by Jean Paul Wijers
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- Book:
- Managing Authentic Relationships
- Published by:
- Amsterdam University Press
- Published online:
- 24 November 2020
- Print publication:
- 04 March 2019, pp 159-170
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Summary
In Chapter 4 we discussed the Relationship Management Strategy development process. The focus of the organization was established and success for Strategic Relationship Management was defined. In Chapter 5 we narrowed the strategic objectives to focus areas by exploring relationship segmentation. In Chapter 8 the term Return-on-Relationship (RoR) was introduced as a measure to quantify the benefits of relationship management.
Success can have different perspectives depending on the objectives defined. To enable alignment and focus across the organization, it is critical to define what success means before investing valuable time and resources in relationship management. Ideally the definition of success is somewhat more than “strengthening our relationship”; it ought to be quantified in the form of Key Performance Indicators (kpis). Once strategic objectives are quantified, management is able to monitor progress and therefore manage investments in relationship management. In this chapter we will look more closely at performance in the context of Strategic Relationship Management.
Performance management models
Different performance management models are available to the Manager of the Network to monitor the results of investments. Some of these models have a more financial bias. Another trade-off between the models is the degree to which they drive behavioral change in the organization. Key models are plotted in Figure 9.1.1, and we can conclude that the Balanced Scorecard is a practical tool for the Manager of the Network to steer behavior on the basis of both financial and non-financial indicators.
Management accounting is a performance management model applied in most organizations by the financial discipline. Budgets are made available to departments, expenses are administered, and periodically costs versus the available budgets are reported. This level of performance management has a strong financial bias and tends to have limited impact on relationship behavioral change in the organization other than making people cost conscious.
Activity-based management (ABM)
Activity-based management allocates different cost components (including overhead costs) of the organization to activities or to relationships. It helps the organization get a better understanding of the costs required to develop and maintain a relationship.